They'll definitely have a large percentage of it paid off by that time, but most likely it will all be paid back before 2014.
A handful of insiders own over 5M worth of the common stock, so they've got a huge amount of money riding on the success of GFED. (Huge amount for a few southwest Missouri folks anyway)
This stock is in the summer doldrums for sure. We're looking at more than 2 months of declining prices at this point. There just aren't any buyers out there right now. When the bid is 100 shares here and there, but people are trying to dump 1k shares at a time you inevitably won't be looking at stellar performance.
Buffet, thanks for the report from the annual meeting, definitely makes me feel a lot better that the "plan" is to pay off the TARP without dilution to shareholders. I think if TARP is paid off without any dilution the stock will have a tremendous rally to the upside, as it should coincide by 2013 with earnings of at least $1.75 imo.
Everything on paper looks good. Yet, I'm going to see what they report in Q2 before I buy anymore. Chris, thanks for the analysis, I would agree with you, but I think $2.63 may be a stretch, I feel like after TARP is paid in full we should be around $2 with a 10 P/E for $20. I think in the long run if the bank continues to execute that this is a $25-$30 stock with dividends, but I dont see that until at least 2014-2015 time.
If we can gain momentum in earnings and reduction in NPA for the rest of 2012, we should be at $1.10 minimum, and at least $10 in share price, so at least a 33% return from here.
I see no reason this wouldn't earn around 2$ per-share at a minimum. Trailing EPS is at $1.12 despite having 2 weak quarters, and if you add $.41 for the preferred dividend that would have made EPS $1.53.
GFED has had to provision 2-3M more than "normal" for loan loss reserves over the last year, so, under typical conditions that would have added $.73 to $1.10 to earnings.
That means "normally" GFED could have been capable of EPS $2.26-$2.63 in my view.
The current tax rate is lower than normal though because of retained tax loss savings, but even without those tax savings I feel GFED could have earned $2.00 or higher.
Book value is in the mid-teen's, so that would support a much higher price than the current one.
Without TARP I think this could easily command a 13-14x multiplier, so I feel $25-$30 per-share. This traded higher than 30$ per-share without TARP before. That's something to think about.
What do we expect the value to be once tarp is completely repaid in 2013?
I am a small holder, but looking to increase my holdings either at current holdings or 15-25% lower if we see it.
That all sound positive in my view. Especially the plan to wind down their TARP loan without diluting current common shareholders. Thanks for taking the time to go and share the information!
I did go. Some of the key points I took away is that
1. They expect the momentum of the earnings continue.
2. They have an execution plan regarding TARP to eliminate TARP prior to the end of 2013, when the dividend rate would increase from 5% 5o 9%. The plan for eliminating TARP and the warrants involved no dilution of existing shareholders.
3. Asset Quality. Recently delinquent accounts are really low, well below peer. Also the NPA's are primarily the result of six large relationships. I also took away that they feel they have a good handle on this and I expect improvement in this category from what I heard.
4. Shaun Burke, the CEO, also said that 25% of the outstanding stock is owned by insiders. So the interest of management is clearly aligned with the company and shareholder interest.
Truthfully I wasn't expecting much in the way of new information but came came with a lot of good information regarding company intent moving forward.
I did not attend the shareholder's meeting, but was told by someone who did that Mr. Burke stated he could not be specific, but he expected TARP to be paid off " sooner, than later." He implied that the application process to the Federal Reserve was already in process. He further stated that there should be no dilutive effect on book value. Second hand report, but good news if true.